Thursday, June 29, 2017

Moldova cuts rate 100 bps to boost demand

Moldova's central bank cut its basic interest rate by 100 basis points to 8.0 percent, along with its other policy rates, to boost demand and help bring inflation to its target over the medium term.
It is the first rate cut by the National Bank of Moldova (NBM) since a 50 basis point cut in October 2016 as it slowly continues the easing cycle begun in February 2016 when it began cutting the rate from 19.50 percent.
Moldova's inflation rate rose to 7.4 percent in May from 6.6 percent in April, above the NBM's target range of 5.0 percent, plus/minus 1.5 percentage points. Core inflation in May was 4.8 percent, down from 4.9 percent in the previous month.
The central bank said the rise in inflation was due to short-term shocks but aggregate demand remains moderate and "does not create additional inflationary pressures," the NBM said, adding that data over the last two to three months show moderating economic activity and lower medium-term inflationary pressure.